The for-profit college with the fastest growth in income from taxpayer-funded students is owned by a holding company in the Netherlands, a structure that some companies have used for tax advantages, Times Higher Education has learned.
London-based St Patrick’s International College has more than 4,000 students on public-backed loans studying sub-degree level higher national certificate and higher national diploma courses – the highest number of any private college.
St Patrick’s is linked to the London School of Business and Finance. LSBF has the second highest number of students on public-backed loans studying HNCs and HNDs (1,354), according to government figures released in a parliamentary answer to Liam Byrne, the shadow minister for universities, science and skills.
Companies House documents show that St Patrick’s is owned by St Patrick’s Holdings BV. The “BV” structure, the Dutch equivalent of a private limited liability company, has been used by companies such as Starbucks. The Netherlands does not require company accounts to be made publicly available and its tax regime is regarded as favourable.
A St Patrick’s spokesman said the structure “does not affect the liability of UK subsidiaries for corporation tax on profits arising from trade or business conducted in or from the UK”.
In April 2012, St Patrick’s was taken over by Interactive World Wide Limited, owner of a wider group of colleges to which LSBF is linked via the Russian-origin Etingen family. IWWL’s majority shareholder is Arkady Etingen, also known as Aaron Etingen, the founder of LSBF. But since the IWWL takeover, ownership has been transferred, to St Patrick’s Holding BV.
The expansion of private higher education provision mounted by David Willetts, the universities and science minister, allowed St Patrick’s to boost its domestic income via the Student Loans Company. In 2012-13, the college grew its income from SLC-paid fees to £11 million, after being so small before that it was unlisted in the previous year’s figures.
Sally Hunt, the University and College Union’s general secretary, said: “The government has created a situation where companies that lack transparency and accountability are profiting from subsidies while public universities are seeing budgets slashed.”
LSBF and St Patrick’s are both listed as “partners” of Global University Systems, of which Mr Etingen is founder and executive chairman.
Asked who owned the Dutch holding company, a St Patrick’s spokesman said: “St Patrick’s Holdings BV is wholly owned by Global University Systems BV, also a Dutch company. Global University Systems BV is a privately owned operator in the global education market.”
He said it was “entirely appropriate for students attending UK colleges in which European or overseas investors have a significant or controlling interest to receive UK government-funded grants and loans”, provided those colleges met the government’s “stringent” checks.
The St Patrick’s spokesman added: “The scale of UK government support for UK students enrolled at institutions owned by overseas investors could usefully be compared with the scale of the income received by UK publicly funded HEIs from overseas students in receipt of scholarships, grants and similar aid financed or subsidised by their governments.”
